Valmet Oyj: Valmet's Half Year Financial Review January 1 - June 30, 2021: Orders received increased to EUR 1.2 billion and Comparable EBITA to EUR 95 million in the second quarter

2021-07-22 13:00:00

Valmet's Half Year Financial Review January 1 - June 30, 2021: Orders received increased to EUR 1.2 billion and Comparable EBITA to EUR 95 million in the second quarter

Valmet Oyj's stock exchange release on July 22, 2021 at 2:00 p.m. EEST

Figures in brackets, unless otherwise stated, refer to the comparison period, i.e. the same period of the previous year.

April-June 2021: Comparable EBITA margin improved to 10.1 percent
  • Orders received increased 49 percent to EUR 1,228 million (EUR 826 million).

  • Orders received increased in all business lines.

  • Orders received increased in South America, Asia-Pacific, China and North America, and decreased in EMEA (Europe, Middle East and Africa).

  • Net sales remained at the previous year's level and amounted to EUR 943 million (EUR 919 million).

  • Net sales increased in the Paper, Automation, and Services business lines, and decreased in the Pulp and Energy business line.

  • Comparable earnings before interest, taxes and amortization (Comparable EBITA) were EUR 95 million (EUR 76 million), and the corresponding Comparable EBITA margin was 10.1 percent (8.3%).

  • Comparable EBITA increased due to higher gross profit margin.

  • Earnings per share were EUR 0.43 (EUR 0.29).

  • Items affecting comparability amounted to EUR 2 million (EUR -6 million).
  • Cash flow provided by operating activities was EUR 180 million (EUR 151 million).
January-June 2021: Orders received and Comparable EBITA increased
  • Orders received increased 26 percent to EUR 2,540 million (EUR 2,013 million).

  • Orders received increased in the Paper, Pulp and Energy, and Automation business lines, and remained at the previous year's level in the Services business line.

  • Orders received increased in EMEA, North America, China and South America and decreased in Asia-Pacific.

  • Net sales remained at the previous year's level and amounted to EUR 1,801 million (EUR 1,740 million).

  • Net sales increased in the Paper business line, remained at the previous year's level in the Services business line, and decreased in the Automation, and Pulp and Energy business lines.

  • Comparable earnings before interest, taxes and amortization (Comparable EBITA) were EUR 175 million (EUR 128 million), and the corresponding Comparable EBITA margin was 9.7 percent (7.4%).

  • Comparable EBITA increased due to higher gross profit.

  • Earnings per share were EUR 0.81 (EUR 0.49).

  • Items affecting comparability amounted to EUR 11 million (EUR -7 million).
  • Cash flow provided by operating activities was EUR 328 million (EUR 324 million).

Guidance for 2021

Valmet reiterates its guidance issued on April 16, 2021, in which Valmet estimates that net sales in 2021 will increase in comparison with 2020 (EUR 3,740 million) and Comparable EBITA in 2021 will increase in comparison with 2020 (EUR 365 million).

Short-term market outlook

Valmet estimates that the short-term market outlook for services has improved to good/satisfactory (previously satisfactory). Valmet reiterates the good short-term market outlook for automation, pulp, board and paper, and tissue and the weak market outlook for energy.

President and CEO Pasi Laine: Order backlog increased to a new record

"Valmet's orders received increased to EUR 1,228 million in the second quarter of 2021. Orders received increased in all of Valmet's four business lines. In the Paper business line, the quarterly order intake reached a new record and amounted to EUR 440 million. Orders received in Pulp and Energy increased to EUR 326 million. In the stable business (Services and Automation business lines), orders received increased to EUR 487 million, when including Automation package sales to capital projects. This means that the stable business orders received were now at the same level as in the second quarter of 2019, before the COVID-19 pandemic. Our order backlog increased to a record high of EUR 4,019 million, which is EUR 762 million higher than at the end of 2020.

Net sales remained at the previous year's level and Comparable EBITA increased. The Comparable EBITA margin was 10.1 percent.

On July 2, Valmet announced the plan to combine Valmet and Neles through a merger. The combination is subject to, among other things, approval by the Extraordinary General Meetings of Valmet and Neles, as well as obtaining of merger control and other regulatory approvals."

 

Key figures[1]

[][][][]
EUR million Q2/2021 Q2/202 Change Q1-Q2/ Q1-Q2/ Change
0 2021
2020
Orders received 1,228  826 49  % 2,540  2,013 26  %
Order backlog[2] 4,019  3,492 15  % 4,019  3,492 15  %
Net sales 943  919 3  % 1,801  1,740 3  %
Comparable 95  76 24  % 175  128 37  %
earnings before
interest,
taxes and
amortization
(Comparable
EBITA)
% of net sales 10.1  % 8.3  % 9.7  % 7.4  %
Earnings before 97  70 39  % 186  121 54  %
interest, taxes
and
amortization
(EBITA)
% of net sales 10.3  % 7.6  % 10.3  % 6.9  %
Operating profit 85  62 36  % 161  104 54  %
(EBIT)
% of net sales 9.0  % 6.8  % 8.9  % 6.0  %
Profit before 83  60 39  % 158  100 59  %
taxes
Profit for the 64  44 44  % 121  74 64  %
period
Earnings per 0.43  0.29 44  % 0.81  0.49 64  %
share, EUR
Earnings per 0.43  0.29 44  % 0.81  0.49 64  %
share, diluted,
EUR
Equity per share, 7.61  6.43 18  % 7.61  6.43 18  %
EUR[2 ]
Cash flow provided 180  151 19  % 328  324 1  %
by operating
activities
Cash flow after 168  124 35  % 293  280 4  %
investments
Return on equity 21  % 15  %
(ROE) (annualized)
Return on capital 20  % 16  %
employed (ROCE)
before taxes
(annualized)
Equity to assets 39  % 38  %
ratio[2]
Gearing[2] -1  % -23  %

1. The calculation of key figures is presented on page 48.
2. At end of period.

Orders Q2/2021 Q2/2020 Change Q1-Q2/ Q1-Q2/ Change
received, EUR 2021 2020
million
Services 372  328  13  % 756  726  4  %
Automation 91  81  12  % 194  173  12  %
Pulp and 326  215  51  % 787  591  33  %
Energy
Paper 440  201  >100% 803  522  54  %
Total 1,228  826  49  % 2,540  2,013  26  %
 
Order As at Jun 30,2021 As at Jun 30,2020 Change As at Mar 31,2021
backlog, EUR
million
Total 4,019  3,492  15  % 3,709 

Net sales, EUR million Q2/2021 Q2/2020 Change Q1-Q2/ Q1-Q2/ Change
2021 2020
Services 338  322  5  % 628  617  2  %
Automation 81  77  6  % 131  146  -10  %
Pulp and Energy 238  265  -10  % 469  506  -7  %
Paper 285  255  12  % 574  472  22  %
Total 943  919  3  % 1,801  1,740  3  %

News conference and webcast for analysts, investors and media

Valmet will arrange a news conference in English as a live webcast at https://valmet.videosync.fi/2021-q2-results on Thursday, July 22, 2021, at 3:00 p.m. Finnish time (EEST). President and CEO Pasi Laine and CFO Kari Saarinen will be presenting the results.

Recording of the webcast will be available shortly after the event at the same address.

It is possible to take part in the news conference through a conference call. Conference call participants are requested to dial in at least five minutes prior to the start of the conference at

Finland +358 981710310
United Kingdom +44 3333000804
France +33 170750711
Germany +49 6913803430
Norway +47 23500243
Sweden +46 856642651
United States +1 6319131422

The participants will be asked to provide the following conference PIN: 32260054#. All questions should be presented in English.

The event can also be followed on Twitter at http://www.twitter.com/valmetir.

Due to COVID-19 pandemic, the news conference cannot be attended in person.

Further information, please contact:
Pekka Rouhiainen, Director, Investor Relations, Valmet, tel. +358 10 672 0020
Kari Saarinen, CFO, Valmet, tel. +358 50 317 1830

VALMET

Kari Saarinen
CFO

Pekka Rouhiainen
Director, Investor Relations

Important Notice

The merger of Valmet and Neles Corporation and the merger consideration securities have not been and will not be registered under the U.S. Securities Act of 1933 (the "U.S. Securities Act"), and may not be offered, sold or delivered within or into the United States, except pursuant to an applicable exemption of, or in a transaction not subject to, the U.S. Securities Act.

The information in this release is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of, or located in, any locality, state, country or other jurisdiction where such distribution or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction and it does not constitute an offer of or an invitation by or on behalf of, Valmet, or any other person, to purchase any securities.

The information in this release contains forward-looking statements, which are information on Valmet's current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. These statements may include, without limitation, any statements preceded by, followed by or including words such as "target," "believe," "expect," "aim," "intend," "may," "anticipate," "estimate," "plan," "project," "will," "can have," "likely," "should," "would," "could" and other words and terms of similar meaning or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond Valmet's control that could cause Valmet's actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding Valmet's present and future business strategies and the environment in which it will operate in the future.

 

Valmet is the leading global developer and supplier of process technologies, automation and services for the pulp, paper and energy industries. We aim to become the global champion in serving our customers.

Valmet's strong technology offering includes pulp mills, tissue, board and paper production lines, as well as power plants for bioenergy production. Our advanced services and automation solutions improve the reliability and performance of our customers' processes and enhance the effective utilization of raw materials and energy.

Valmet's net sales in 2020 were approximately EUR 3.7 billion. Our 14,000 professionals around the world work close to our customers and are committed to moving our customers' performance forward - every day. Valmet's head office is in Espoo, Finland and its shares are listed on the Nasdaq Helsinki.

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